While growth is established for NYSE:NVO, the stock's valuation remains reasonable.

Last update: Jan 2, 2024

Here's NOVO-NORDISK A/S-SPONS ADR (NYSE:NVO) for you, a growth stock our stock screener believes is undervalued. NYSE:NVO is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

How do we evaluate the Growth for NYSE:NVO?

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:NVO has earned a 7 for growth:

NVO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.65%, which is quite good.
The Revenue has grown by 28.29% in the past year. This is a very strong growth!
The Revenue has been growing by 9.64% on average over the past years. This is quite good.
NVO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.37% yearly.
NVO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.51% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Evaluating Valuation: NYSE:NVO

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:NVO has earned a 5 for valuation:

Based on the Price/Earnings ratio, NVO is valued a bit cheaper than 78.71% of the companies in the same industry.
Based on the Price/Forward Earnings ratio, NVO is valued a bit cheaper than the industry average as 79.70% of the companies are valued more expensively.
Based on the Enterprise Value to EBITDA ratio, NVO is valued a bit cheaper than 77.72% of the companies in the same industry.
NVO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NVO is cheaper than 79.70% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NVO may justify a higher PE ratio.
NVO's earnings are expected to grow with 30.33% in the coming years. This may justify a more expensive valuation.

Health Assessment of NYSE:NVO

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:NVO has earned a 7 out of 10:

NVO has an Altman-Z score of 11.06. This indicates that NVO is financially healthy and has little risk of bankruptcy at the moment.
NVO has a Altman-Z score of 11.06. This is amongst the best in the industry. NVO outperforms 88.61% of its industry peers.
NVO has a debt to FCF ratio of 0.34. This is a very positive value and a sign of high solvency as it would only need 0.34 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.34, NVO belongs to the best of the industry, outperforming 94.55% of the companies in the same industry.
NVO has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
NVO does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How do we evaluate the Profitability for NYSE:NVO?

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:NVO scores a 9 out of 10:

The Return On Assets of NVO (25.10%) is better than 97.52% of its industry peers.
The Return On Equity of NVO (80.99%) is better than 98.02% of its industry peers.
With an excellent Return On Invested Capital value of 58.71%, NVO belongs to the best of the industry, outperforming 99.01% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NVO is significantly above the industry average of 16.81%.
The last Return On Invested Capital (58.71%) for NVO is above the 3 year average (49.65%), which is a sign of increasing profitability.
With an excellent Profit Margin value of 35.11%, NVO belongs to the best of the industry, outperforming 97.52% of the companies in the same industry.
NVO has a better Operating Margin (43.31%) than 98.02% of its industry peers.
NVO has a better Gross Margin (84.14%) than 88.12% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of NVO contains the most current fundamental analsysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.